Philippe Delmotte
Country Manager Mexico
View from the Top

Future Outlook of Los Ramones Champion

Wed, 01/22/2014 - 16:09

Q: How has Mexico’s position evolved in GDF SUEZ’s global portfolio?

A: GDF SUEZ considers Mexico to be a strategic market, one in which the group can bring its valuable expertise to the energy sector’s whole value chain. This statement is supported by our assets in this country: six gas distribution companies, two pipeline companies with a network extending over 900km, and three power plants with 300MW installed capacity. GDF SUEZ is the second largest gas distribution operator in Mexico with almost 410,000 customers and a 10,000km long distribution network. Looking at GDF SUEZ’s history in the country, two elements become evident. First, we have offered water treatment and energy related services in Mexico without any interruptions since 1960. Second, many investors like GDF SUEZ have a very positive view of the recently approved Energy Reform. The company is ready to invest and contribute to the growth of the power sector. We believe the Reform, along with other measures and changes that the current government is implementing, will accelerate growth and progress for Mexico. It is undeniable that Mexico needs to increase natural gas availability and extend its infrastructure network to other regions of the country that currently do not have access to this fuel. In order to do so, certain issues need to be addressed, such as simplifying the processes related to obtaining permits and authorizations from different authorities and levels of government in order to build the needed infrastructure. The issue is rather complicated, as it has prevented industrial and residential customers from being served in a timely fashion.

Q: What are the main advantages that GDF SUEZ brings to the table as a gas transportation operator?

A: Being a global leader in the gas and power sectors, GDF SUEZ has valuable expertise to develop, build, and operate natural gas transportation and infrastructure systems. Additionally, our commercial knowledge allows us to offer customers integrated solutions and flexibility. GDF SUEZ is a customer service-oriented firm. For example, several industries are interested not only in receiving gas, but also electricity, steam, and even chilled water at low costs. We are one of the few companies able to meet all those demands through an integral energy offer.

Q: What makes companies such as GDF SUEZ attractive contractors for PEMEX in projects such as Los Ramones?

A: We are delighted to be collaborating with PEMEX on this pipeline development, in which we will lay around 300km of pipeline in less than 18 months. This deadline was part of the agreement. The important thing to understand is the strong expertise that GDF SUEZ can bring to the country including design, construction, and development operations in addition to attractive commercial terms for pipeline construction. I strongly believe that a stable and reliable company such as GDF SUEZ has to be a part of major investments like Los Ramones that bring value to Mexico.

Q: What opportunities do you see to expand your activities following the Energy Reform?

A: The inclusion of private investments in the development of natural gas infrastructure is really important. In my experience, this has been a controversial subject in many countries. However, the rules are the same for private and public investment, and I do not see any reason to limit either of the two. The National Control Center for Natural Gas (CENAGAS) will also incentivize further investment, providing more security to pipeline constructors and operators. Having a system operator is a positive trait and has worked well in many countries where GDF SUEZ is present. However, I would say that the most important factor to develop a market is to have well-defined and stable long-term rules that foster fair competition. Looking at the value chain, GDF SUEZ can bring additional comprehensive integrated solutions to the clients of our local distribution companies. For instance, many companies across different industries have shown interest in competitively priced electricity, steam, and compressed natural gas. The organic growth occurs through concession expansion by connecting new customers and integrating commercial capabilities to offer new solutions. Another alternative is to expand our presence through participation in new markets or new concessions. We will analyze our possible involvement in future tenders for new distribution zones. We are also looking forward to increasing our presence in Mexico’s electricity industry, mainly by participating in the IPP power plant projects tendered by CFE.